More than half of all advertising networks are paying less in fees to consumers than they were four years ago, according to a report published by The Information.
The report, which is based on data from market research firm Kantar Worldpanel ComTech, finds that online advertising revenues in 2015 are down by nearly $1bn, or 11%.
The biggest drivers of this drop are the rise of mobile advertising, where Google’s YouTube is still the dominant provider, and the proliferation of ad-blocking technologies such as Adblock Plus and Google AdSense.
In the US, ad-supported services accounted for nearly half of the drop, with Netflix, Facebook and Microsoft accounting for nearly one in three of all ad revenue.
“The big three ad networks are all paying a lot less than last year,” said Josh Borenstein, Head of Digital Advertising at Kantar, in a statement.
Advertisers are also losing money as more people move to ad-blockers and they struggle to get the right targeting in the first place.
“It’s really hard to understand why that is,” he added.
“Advertiser spend on advertising is up and the amount of money spent is down, which makes it hard to see how these new technologies could help.”
The ad-backed companies have been forced to cut costs and reduce staff to deal with the slowdown.
The US Department of Justice is investigating ad-sharing firms, including Fiverr, which was recently acquired by Facebook for $1.6bn.
Google has also been struggling to attract advertisers and is struggling to keep up with rising internet usage, which causes online ad spending to increase.
More than half of the ad networks that Kantar analysed were paid less than $10m in fees in 2015.
This is partly because ad-funded services have struggled to get users to spend more time on their ad networks.
But a lot of ad networks, such as Facebook and Google, have also been forced into the arms of the web ad industry, which has been able to cut prices by selling them to smaller ad companies.
Facebook has been making money off its ad network deals for a while, while Google has been forced out of the ad-free space by the rise in ad-tech giants.
There are some signs that ad-based ad networks could be returning to profitability in the coming months.
For instance, the UK-based AdblockPlus, which started its advertising business in 2014, has been offering its services for the past six months, with a new price cut that is starting to make money for the ad network.
Other ad-focused companies have also reached profitability.
Fiverr has been profitable since 2015, according to the report.